2007-291, JONATHAN MCNEAL & a. v. ROBERT M. LEBEL d/b/a RML GENERAL CONTRACTOR & a.

No. 2007-291 Rockingham

General Contractor (Lebel), arising out of the allegedly improper manufacture

, of Concord (Joshua L. Gordon, of Jaffrey (Thomas P. Mullins, of Nashua (Arthur O. Gormley, III

Pullman Modular Industries, Inc. (Pullman) and Robert M. Lebel d/b/a RML page is: http://www.courts.state.nh.us/supreme. the Superior Court (McHugh, J.) in their action against the defendants, a.m. on the morning of their release. The direct address of the court's home HICKS, J. The plaintiffs, Jonathan and Paula McNeal, appeal an order of reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 and orally), for defendant Pullman Modular Industries, Inc. Gormley & Gormley, P.C. on the brief

and orally), for defendant Robert M. Lebel d/b/a RML General Contractor. Tower, Crocker & Mullins, P.A. on the brief

orally), for the plaintiffs. brief), and Bosen & Springer, P.L.L.C., of Portsmouth (Jonathan S. Springer to press. Errors may be reported by E-mail at the following address: Law Office of Joshua L. Gordon on the

ROBERT M. LEBEL d/b/a RML GENERAL CONTRACTOR & a.

editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as p. 2 Lebel a verdict of $16,500.00 on his counterclaim against the

against Pullman on their claim of negligence. The Court awards

negligence. The Court awards the plaintiffs a verdict of $9,250.00 defendant Lebel on their claims of breach of contract and [T]he Court awards the plaintiffs a verdict of $9,250.00 against

of the parties [is] without fault” and awarded damages as follows: With respect to the common law theories, the court concluded that “none

for unpaid work performed.

& Supp. 2007). Lebel counterclaimed for amounts due under the contract and negligence and violation of RSA 205-B:2 (2000) and RSA chapter 358-A (1995 The plaintiffs sued Lebel for breach of contract, and both defendants for

occupancy for the new home until July 2005.

stopped work on the home. The plaintiffs did not obtain a certificate of interpreted this letter to amount to his termination, and, as of October 7, 2004, requesting that he prioritize his work to the exterior of the home. Lebel

On October 4, 2004, the plaintiffs’ attorney sent a letter to Lebel

placed in escrow, but the plaintiffs were not willing to do so. assured payment for work done after October 1. He requested that funds be

informed the plaintiffs that he would not continue construction unless he was

court’s words, “somewhat disappointed and distrustful of one another.” Lebel that date. In fact, by October 1, each of the parties had become, in the trial paid by September 30, 2004, but the home was not ready for occupancy by

The terms of the plaintiffs’ construction financing required the loan to be

building code. to do. Once built, some of the sets of stairs failed to satisfy the applicable for supplying and Lebel built two sets of basement stairs as he had contracted

Pullman eventually delivered, or built on-site, the stairs that it was responsible

Pullman did not deliver any of the three sets of stairs it was to supply. the beam and joists for the attic did not allow for installation of a flat floor, and most prominently that the plaintiffs had expected different kitchen cabinets,

property in August 2004. Mr. McNeal and Lebel noticed several problems,

Pullman manufactured the home and delivered it to the plaintiffs’

and raze the old one upon completion.

near the plaintiffs’ existing home, allowing them to move into the new home

decided to purchase the home from Pullman. The home was to be constructed home. The eventual contract price was $359,042. The plaintiffs and Lebel 2004, the plaintiffs contracted with Lebel for the construction of a modular

The trial court found or the record supports the following facts. In April performing them before the time for performance.” Syncom Indus. v. Wood p. 3 obligations either through words or by voluntarily disabling himself from

anticipatory breach of contract occurs when a promising party repudiates his

seek assurance of payment before continuing his performance. “An breach or repudiation of the plaintiffs’ contractual obligations, entitling Lebel to disbursements under the construction loan was an apparent anticipatory

We read the court’s order as implicitly ruling that the cessation of

enable Lebel to complete the project was unreasonable.” company” and that the plaintiffs’ “unwillingness to escrow sufficient funds to

in accordance with the contract until funding was withdrawn by the finance

[their] interest payments.” The court also ruled that “Lebel performed his work

monies for the Plaintiff[s’] project because they were [two] months behind in construction lender informed Lebel that it “would not be [disbursing] any more The trial court found that on September 30, 2004, the plaintiffs’

determining damages; that they breached the contract; (2) making certain factual findings; (3) On appeal, the plaintiffs argue that the trial court erred in: (1) ruling

breaches, relieving them of further contractual obligations. 3 and assurance of end financing. They further contend that these were material contemplated in the contract; specifically, the placement of funds in escrow LeTarte v. West Side Development Group, LLC

leaving the job prior to completing his work after insisting upon conditions not, 151 N.H. 291 (2004), and Hoyt constituting anticipatory breach in both of our leading cases on the subject, 155 N.H. 73, 83-84 (2007). Interestingly, as we noted in Syncom, the action

to Lebel by that amount. The trial court found that the evidence did not law. Barrows v. Boles $1,978.36 they paid Lebel for a change order, and reduced the damage award

committed no breach. They contend that Lebel breached the contract by contractual liability, asserting that Lebel materially breached and they The plaintiffs first challenge the trial court’s determinations of

rulings of law unless they lack evidentiary support or constitute a clear error of On reconsideration, the court ruled that the plaintiffs were entitled to credit for by RSA 358-A:2 (1995). We will uphold the trial court’s factual findings and defendant committed any unfair or deceptive trade practices as contemplated present and Pullman owes the plaintiffs $9,250.00 at present. to complete his work. Thus the plaintiffs owe Lebel $7,250.00 at

defects” as that phrase is used in RSA 205-B:2; and (5) ruling that neither not paying him for all the work that he did and by not allowing him (4) ruling that the home contained no “substantial plaintiffs as it finds that they breached their contract with him by p. 4 Id

mitigate damages after the repudiation.

failure to avoid those expenses as part of a reasonable effort to recovery for post-repudiation expenditures because of his or her anticipatory repudiation took place, the promisee may be denied

assurance within a reasonable time to be a repudiation of the contract. See the Restatement (Second) of Contracts trial court correctly applied the doctrine here. The comment to section 251 of apparent repudiation, and it is subsequently determined that an

performance of the contract,” Restatement (Second) of Contracts

reasonable grounds for insecurity arise” and declaring a failure to provide such providing a right to demand adequate assurance of due performance “[w]hen law has not previously been recognized in our case law, we conclude that the other hand, the promisee continues to perform after perceiving an Commercial Code (UCC) provides a means for dealing with this dilemma by

complementary regimen of demand for adequate assurance to common-law the doctrine of anticipatory breach that some States have imported the comment a at 277, a duty that has long been an integral component of our effective in bridging the doctrinal, exceptional and operational gap related to § 251 principle “closely related to the duty of good faith and fair dealing in the

Although a right to demand adequate assurance under general contract anticipatory repudiation justifying nonperformance. If, on the In the case of contracts for the sale of goods, Article 2 of the Uniform was not sufficiently clear and unequivocal to constitute an 705 N.E.2d at 660; see breached if the court determines that the apparent repudiation also Restatement (Second) of Contracts § 251 (1981).

RSA 382-A:2-609(1) (1994). This provision of the UCC “has been considered so

. (quotation omitted). breach, the promisee is placed in jeopardy of being found to have

and maintain an action at once for the damages.” LeTarte

repudiation, terminates his or her own performance and sues for If the promisee regards the apparent repudiation as an anticipatory v. Horst

Power, 705 N.E.2d 656, 659 (N.Y. 1998). nonbreaching party with a dilemma. See Norcon Power v. Niagara Mohawk repudiating party are equivocal or uncertain, this option presents the As other courts have recognized, however, where the actions of the apparently

breaching party has the option to treat the repudiation as an immediate breach Our cases note that “[i]n instances of anticipatory breach, the non-

contract. p. 4 Id. at 84. , 105 N.H. 380 (1964), was the failure to make payments under the financing to a conventional mortgage created unreasonable deadlines for the

p. 5 plaintiffs’ delay in getting construction financing and ultimately converting that

The plaintiffs next challenge the trial court’s statement that “[t]he

to its legal rulings.

the plaintiffs’ ability to remain in their old house indefinitely was not necessary

by that date.” We conclude that the court’s background discussion regarding 2004 meant that there was some pressure on Lebel to have all of his work done “[t]he fact that the construction financing would run out on September 30,

court did not find to the contrary: the court explicitly noted in its order that

deadline of September 30, 2004, to pay off their construction loan. The trial The plaintiffs take issue with this language, arguing that they had a firm

have.”

between the parties to go unresolved for far longer than it reasonably should

having a firm deadline to move into their new house that allowed the dispute appears that it was the lack of any real pressure in terms of the plaintiffs not the new house was ready.” The court then observed that “[i]n hindsight it

to do so because they could always continue to live in their existing house until

their new home constructed and move in, they were under no time constraints The trial court stated that “[a]lthough the plaintiffs were anxious to get

certificate of occupancy. We examine each challenged finding in turn.

quality of Lebel’s work; and (4) that the plaintiffs deliberately waited to get their completing construction; (3) that the plaintiffs’ complaint was not with the that the plaintiffs’ financing delays created unreasonable deadlines for

real pressure or firm deadline for the plaintiffs to move into the new house; (2)

specifically contending that the court erred in finding: (1) that there was no

The plaintiffs also challenge a number of the trial court’s factual findings,

argument and uphold the trial court’s rulings on this issue. 5

escrow to pay for the delivered materials”). We accordingly reject the plaintiffs’

under the contract. Cf assurance was a material breach relieving the plaintiffs of further obligation

entire contract was guaranteed by the [buyer’s] depositing sufficient cash in [buyer] that it would deliver the balance of the material only if payment of the seller “had ‘reasonable grounds for insecurity’ and justifiably informed the

Lebel’s request for the escrow of funds, nor his cessation of work pending such

piecemeal delivery of plumbing and heating material fell behind in payment,

assurance of future performance, which the plaintiffs did not supply, neither Because the record reveals sufficient grounds for Lebel to seek adequate

common law of contracts, see

A.2d 427, 433 (Conn. 1973) (where buyer under installment contract for

133, 139 (1989).

p. 6 ending the whole transaction is a total breach that discharges the injured “Only a breach that is sufficiently material and important to justify

not invite Lebel back, however, is immaterial. had no complaint with the quality of Lebel’s work. The reason the plaintiffs did [Lebel] back to complete the job” when they now had the money to do so and

The court opined that it “ha[d] to wonder as to why the plaintiffs did not invite

plaintiffs’ end financing came through only a week after Lebel left the property.

The challenged statement was made in the context of the court noting that the We conclude that the discrepancy on this issue is of no consequence.

with his failure to complete the project and with some of his work.”

elsewhere in its order, the trial court stated that the plaintiffs “were dissatisfied repeated complaints to Lebel about the quality of his work. They also note that the construction had not been completed.” They assert that the exhibits reveal

“[t]heir complaint was never with the quality of [Lebel’s] work, just the fact that

The plaintiffs also contend that the trial court erred in finding that

We find no error.

September) to slightly under two months (early August through September).

frame for completing the project shrank from five months (May through

for various reasons, attributable in part to each of the parties, Lebel’s time respect to delays on the project. The court’s order merely acknowledges that July 6, 2004, but we note that the court did not find Lebel blameless with 6

contractually obligated to allow him to finish the job. material breach; absent material breach by Lebel, the plaintiffs were irrelevant so long as any flaws in Lebel’s performance did not amount to a that “[l]argely affected the court’s legal rulings to the plaintiffs’ detriment. The court stated

Lebel. They assert that Lebel still delayed placing the order with Pullman until

plaintiffs’ subjective satisfaction, or lack thereof, with Lebel’s work is legally

available until June 1, a month and a half after their mid-April agreement with July.” The plaintiffs do not dispute that their construction financing was not upon in mid April, production did not begin on the plaintiffs’ house until mid

and Lebel that delayed conversion to a conventional mortgage. time to manufacture and set the house” and that it was mistakes by Pullman

that “even though the contract that Lebel had with the plaintiffs was agreed

contrary, their construction financing was in place “as of June 1, in plenty of completion of the construction that could not be met.” They argue that, to the

there was a delay in getting the plaintiffs’ home built” (emphasis added), noting

because of the difficulty in obtaining construction financing, be clearly erroneous. Syncom Indus.

p. 7 favorable to the prevailing party, and will overturn an award only if we find it to

remaining work [did not] exceed[] $22,138.00,” which is the balance left on the damages. In reviewing damage awards, we view the evidence in the light most The plaintiffs also contend that the trial court erred in its calculation of

September 17, 2004). The court then found that the “fair value of the

July. We cannot say this inference was impermissible.

the contract (contract price of $359,042 less the $320,404 paid through also found that at the time he left the jobsite, Lebel was owed $38,638 under left the project he was owed $16,500 for work completed to date. The court obtaining a certificate of occupancy, yet did not have the stairs repaired until

in an October 1, 2004 invoice and later breakdown thereof, that at the time he October, they ordered new kitchen cabinets, an item not necessary for not challenged, that when the plaintiffs obtained their permanent financing in following July.” The trial court drew an inference from the facts, apparently

done to be $336,904. Rather, the court accepted Lebel’s contention, evidenced order nor its order on motion for reconsideration calculates the value of work The record does not support this contention. Neither the court’s original stairs corrected, which was an item necessary for occupancy, until the

least partially to have been calculated” and that they “elected not to get the “[w]aiting to obtain a Certificate of Occupancy until July of 2005 appears at Finally, the plaintiffs challenge the trial court’s finding that their

a change order), from $336,904. $320,404, the total amount paid to Lebel through September 17 (not including their brief, that the court arrived at the $16,500 figure by subtracting

this amount by “conflating the value $16,500.00.” The plaintiffs argue that the trial court erred in its calculation of The court found that Lebel “is entitled to be paid an additional

value of work done was $336,904.” They then imply, in a calculation shown in error. got paid for it.” Specifically, the plaintiffs argue that “the court calculated the satisfaction with Lebel’s work is legally irrelevant, and we find no reversible of Mr. Lebel’s work with the amount he record.”). Accordingly, any finding regarding the plaintiffs’ subjective

require an indication that the award of damages was reasonable. Id. breaches of the contract. Cf does not require mathematical certainty in computing damages, but does precludes a ruling that the flaws in Lebel’s workmanship, if any, were material , 155 N.H. at 88. New Hampshire law

performed in a substandard manner, unless the finding lacks support in the

contract until the construction lender stopped disbursing funds. This finding The trial court found that Lebel performed in accordance with the

to evaluate the evidence, and we will not reverse a finding on whether a party

B:4 (2000) (providing any action by buyer to enforce provisions of RSA chapter in Danforth

thereby failing to award them costs and attorney’s fees pursuant to RSA 205problems they identified are “substantial defects” under the statute, and in the costs of completion and performed a single damage calculation as set forth The plaintiffs argue that the trial court erred in failing to find that various

without a written manufacturer’s warranty that provides, inter 8

court could have added the cabinet, stair and ridge beam costs to the rest of and other equipment installed or included in such home by the manufacturer.” previously awarded to arrive at a net verdict for Lebel of $7,250. While the attic ridge beam and subtracted that total of $9,250 from the $16,500

person sell a new prefabricated or presite built home in New Hampshire

authorities.” Id

the structure, plumbing, heating, and electrical systems and in all appliances such home is free from any substantial defects in materials or workmanship in separately assessed Lebel for the costs of correcting the cabinets, stairs and

We next address the application of RSA 205-B:2, which requires that no

error. its “method of computation . . . is reasonable and in accordance with the the partial performance of the contract by the other party.” Danforth v. Although the trial court in this case reversed the order of the calculation,, it nevertheless reached the same result and we therefore find no

damage occasioned by the builders’ failure to perform the contract.” Id

contract price to arrive at the $16,500 awarded Lebel. The court then is the contract price. Danforth work was $22,138, the court could have subtracted that amount from the necessary for the plaintiffs to finish or repair” certain incomplete or defective

. at 470. In other words, having found that the “the amount

therefrom, [are] liable to pay for the benefit received, – the worth to [them] of the work as it [was] done, and if any advantage has accrued to [them] 69. his work required correction, the plaintiffs “necessarily receiv[ed] the value of. at 468contract, is conveniently ascertained by deducting from the contract price the price, the benefit received, for which [they] should pay on the basis of the home owners’] liability under the contract completely performed at the contract

the benefit which the owner would receive from a compliance with the contract” (i.e. (1834) (pronouncing this rule in case of contract for labor). “[T]he measure of contract after paying Lebel for the work completed after September 17, 2004 Freeman, 69 N.H. 466, 468 (1898); see also Britton v. Turner, 6 N.H. 481, 492

Although Lebel did not complete performance under the contract, and some of “conflat[ed] the value of Mr. Lebel’s work with the amount he got paid for it.” We cannot conclude, as argued by the plaintiffs, that the trial court

, $38,638.00 minus $16,500). p. 9 Webster’s Dictionary

definition in statute regulating manufactured homes).

habitation”); Colo. Rev. Stat. § 24-32-3302(6) (2007) (providing a similar

parts not fit for the ordinary use for which it was intended or for human components or material of a mobile home that renders the home or any of its warranty statute as “any insufficiency in the performance, construction,

Wyo. Stat. Ann. § 35-18-102(a)(i) (2007) (defining “[d]efect” in mobile home

definition in a statutory warranty of mobile homes and recreational vehicles);

ordinary meanings to the words used.” Portsmouth Country Club v. Town of

with the Code.”); Fla. Stat. ch. 320.822(15) (2007) (providing a nearly identical system or component part of the manufactured home which fails to comply cared for in normal use. The term also means any structural element, utility

whole. We first examine the language of the statute and ascribe the plain and legislative intent as expressed in the words of the statute considered as a “In matters of statutory interpretation, we are the final arbiter of

occurring in a manufactured home which has been reasonably maintained and

“[a]ny substantial deficiency in or damage to materials or workmanship 9 (defining “[s]ubstantial defect” in manufactured home warranty statute as contractor, dealer, or manufacturer”); N.C. Gen. Stat. § 143-143.9(14) (2007)

conclude that the term “substantial defect[]” encompasses, at a minimum, the

determination of what constitutes a “substantial defect[]” under the statute. this issue presents us with a question of statutory interpretation; namely, a awarded $5,000 in damages for necessary repairs. The plaintiffs assert that

components, appliances, or systems as installed or manufactured by the

591. Accordingly, relying upon the plain meaning of the language used, we necessary for completeness, perfection, or adequacy in form or function.” Id. at 2280 (unabridged 2002). It defines “defect” as a “want or absence of something moment: important, essential.” Webster’s Third New International Dictionary

components, or workmanship resulting in improper function of materials, objectively manifested by broken, ripped, cracked, stained, or missing parts or statute, “[s]ubstantial defects in materials and workmanship” to mean “defects

“substantial defects,” unlike legislatures in other states that have done so. See

interpreted the phrase “substantial defects” in reaching its conclusion. We The court provided no further analysis and gave no indication of how it no ‘substantial defects’ in the home as that phrase is used in” RSA 205-B:2.

Cal. Civ. Code § 1797.1(d) (Deering 2005) (defining, in mobile home warranty

We note that the legislature has not chosen to define the term

Greenland, 152 N.H. 617, 620 (2005) (quotation omitted).

liability under RSA chapter 205-B, the trial court stated only that “[t]here were fees”). In concluding that the evidence did not support the plaintiffs’ theory of the Consumer Protection Act addresses. p. 10 transaction and did not induce the type of misinformed decision representation[s] [were] separate and distinct from any consumer

make informed comparisons. Here, . . . [the allegedly deceptive]

products, thus making it difficult or impossible for consumers to withholding or failing to generate critical data about their alternatives. Some sellers have undermined this process by either

the New Hampshire Consumer Protection Act. See

it must be based on full and accurate knowledge of the

defendants did not engage in unfair or deceptive trade practices in violation of

alternative products. For his decision to be meaningful, however, consumer ordinarily protects himself by choosing among doctrine involves the withholding of material information. A

The plaintiffs also challenge the trial court’s conclusion that the

Perhaps the most common application of the unfairness

award of costs and attorney’s fees pursuant to RSA 205-B:4. have already been awarded for the defective stairs, we remand solely for an

of the Consumer Protection Act. We agree with the trial court that these acts do not fall within the ambit

reverse the court’s ruling on this issue with respect to Pullman. As damages

couldn’t, or were at least indifferent as to whether they could.”

responsible constitutes a “substantial defect[]” under RSA 205-B:2 and we find other than that Pullman’s failure to deliver the stairs for which it was accomplish. Accordingly, we conclude that no reasonable finder of fact could

complete a reasonably defect-free house in six weeks when “they knew they engaged in unfair and deceptive trade practices by promising to deliver and many of the house’s problems.” They also contend that the defendants

second floor is an essential function which the stairs are necessary to

disclosing issues with the driveway and building site which may have caused

floor unusable. It further appears to us that the provision of access to the impossible for the occupants to access the second floor, rendering the second lack of stairs connecting the first and second floors would have made it

with the stairs that would cause the house to fail its inspection, and in not contend that Lebel and Pullman “were deceptive in not disclosing problems

the stairs may have caused in obtaining a certificate of occupancy, the initial

essential function. See absence of something necessary to adequately perform an important or

defect[]” under RSA 205-B:2. Putting aside any difficulties the problems with We conclude that the failure to deliver stairs constitutes a “substantial

.

concurred.

Affirmed in part; reversed

the remedies under the Consumer Protection Act.” Barrows work”). “An ordinary breach of contract claim does not present an occasion for

BRODERICK, C.J.